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During the past year, sovereign-wealth funds earned a reputation as the well-funded investors of last resort, but the funds have become decidedly more cautious as the substantial investments they made stumbled. Managing nearly $3 trillion in assets, SWFs took global financial markets by storm last year, replacing private equity and hedge funds as the driver of corporate takeovers. The funds poured money into Western financial institutions, but their billions were not enough to quell the brewing financial crises.

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During the past year, sovereign-wealth funds earned a reputation as the well-funded investors of last resort, but the funds have become decidedly more cautious as the substantial investments they made stumbled. Managing nearly $3 trillion in assets, SWFs took global financial markets by storm last year, replacing private equity and hedge funds as the driver of corporate takeovers. The funds poured money into Western financial institutions, but their billions were not enough to quell the brewing financial crises.

During the past year, sovereign-wealth funds earned a reputation as the well-funded investors of last resort, but the funds have become decidedly more cautious as the substantial investments they made stumbled. Managing nearly $3 trillion in assets, SWFs took global financial markets by storm last year, replacing private equity and hedge funds as the driver of corporate takeovers. The funds poured money into Western financial institutions, but their billions were not enough to quell the brewing financial crises.

While Western financial institutions have been shackled by crises during the past year, the coffers of many Middle Eastern states have been bolstered by soaring oil prices. The states, specifically their sovereign-wealth funds, are using their renewed financial strength to acquire stakes in key industries around the globe, triggering concern from Western leaders.

While Western financial institutions have been shackled by crises during the past year, the coffers of many Middle Eastern states have been bolstered by soaring oil prices. The states, specifically their sovereign-wealth funds, are using their renewed financial strength to acquire stakes in key industries around the globe, triggering concern from Western leaders.

If sovereign-wealth funds continue their growth, they will exceed the economic output of the U.S. within seven years, a new study has found. The funds have grown at a rate of 24% per year for the last three years. By the end of last year, the funds grew to $3.5 trillion, with China's in the lead.